REQUEST FOR GUIDANCE - PROGRAM SUPPORT COSTS AT

UNCLAS UNVIE VIENNA 000080 SENSITIVE SIPDIS FOR ISN/MNSA, IO/T; DOE FOR NA-24, NA-25, NA-21 E.O. 12958: N/A TAGS: IAEA OTRA KNNP TRGY AORC UN PREL AS CA SUBJECT: REQUEST FOR GUIDANCE - PROGRAM SUPPORT COSTS AT UPCOMING BOARD MEETINGS REF: UNVIE 27 ¶1. (SBU) This is a guidance request. Per reftel, the simmering issue of Program Support Costs (PSCs) may come to the fore sooner rather than later. A Canadian contribution of nearly 4 million USD for the Nuclear Security Fund is on hold pending release of an official PSC policy, and there is some risk that Director General ElBaradei will pass the contribution to the March or June Board of Governors meetings for decision. Meanwhile, DDG Waller's promised release of a "Secretariat Directive" on PSCs has not been forthcoming and is rumored to be languishing in the IAEA's front office. ¶2. (SBU) At a meeting of the Geneva Group on February 18, members agreed it was time to define the measures needed for achieving clarity on the PSC issue and transmit them to the Secretariat. Members agreed informally on these measures and formalized them in a non-paper for members to use as a basis for consultation with capitals (below). While Mission pushed to include a demand the PSCs be applied to the Technical Cooperation Fund (TCF),Japan proved hesitant to commit to another battle with the G-77 over this issue (reftel). In the interest of building consensus and making progress on the PSC policy, Mission agreed to relinquish the TCF point for the moment. The due date of the consultation process is March 2 (the first day of the March Board of Governors meeting). Request for Guidance -------------- ¶3. (SBU) Mission requests permission to 1) join the likely Geneva Group consensus on the below non-paper by March 2, 2) transmit a cover letter to the non-paper as co-chair of the Geneva Group, and 3) rely on points from these two documents should the issue come up in the March Board. BEGIN COVER LETTER Dear Mr. Waller: I am writing you in my capacity as Co-Chair of the IAEA Geneva Group to transmit the attached non-paper, "Measures to Achieve a Transparent and Fair Program Support Cost Policy (PSC). The Geneva Group regrets past difficulties in achieving consensus among Member States on this issue, and hopes the attached non-paper serves as a point of departure for further consultations. We also hope to see the spirit of these measure enshrined in the forthcoming Secretariat Directive on PSCs (referred to in your December 24 letter). Our goal is to achieve a PSC policy that is acceptable to all Member States, preferably without resorting to the Board of Governors for a decision on individual contributions. To that end, the Geneva Group welcomes the Secretariat's reactions to the contents of this non-paper. We also invite your attendance at a working-level meeting of the Geneva Group in March to elaborate on the pending issues (at a date convenient to you). Sincerely, Gregory L. Schulte BEGIN NON-PAPER "Measures to Achieve a Transparent and Fair Program Support Cost Policy (PSC)" - Publish an official PSC policy that applies to all extra budgetary contributions. - Establish 7 percent as the standard rate, with any variations categorized in a "rates scale." - Refer to PSCs as a separate line item in all extra budgetary, transfer of funds documents. (If the rate deviates from the standard 7 percent, the "rates scale" must be referenced in the line item.) - Set a flat rate for cost-free experts and junior professionals. SCHULTE